How Closely a Court is Willing to Look at Your Claim May Determine its Patent Eligibility

The Court of Appeals for the Federal Circuit upheld the rejection of a patent applicant’s claims in In re Smith, No. 2015-1664, 2016 U.S. App. LEXIS 4431 (Fed. Cir. Mar. 10, 2016). The applicant had appealed an examiner’s rejection, and the Patent Trial and Appeal Board’s sustaining of that rejection, of claims directed to methods of conducting a game of blackjack involving a side wager resolved based on modulo 10 hand scoring and the achievement of a “Natural 0” value hand. The rationale for the rejection was that the claims were directed to an abstract idea and did not qualify for patent protection under 35 U.S.C. § 101. Specifically, the Examiner had stated that the claims “represented ‘an attempt to claim a new set of rules for playing a card game,’ which ‘qualifies as an abstract idea.’” Smith, 2016 U.S. App. LEXIS 4431 at *4.

Applying the Mayo/Alice, two-part test for subject-matter eligibility, the Court first concluded that the claims were directed to an abstract idea. The Court characterized the claims as being directed to rules for conducting a wagering game. It then drew an analogy between the underlying rules that resulted in the claimed methods and the fundamental economic practices found abstract in Bilski and Alice, such as hedging risk. Quoting the Patent Trial and Appeal Board’s reasoning, the Court agreed that “[a] wagering game is, effectively, a method of exchanging and resolving financial obligations based on probabilities created during the distribution of the cards.”

The Court then concluded that the additional elements required by the claims did not provide an “inventive concept” that would render the claims a patent-eligible application. The Court limited its analysis for this step to the claimed physical cards utilized to administer the game, which it dismissed as being “purely conventional.” Speculating on other situations that may arise, the Court opined that a new or original deck of cards could potentially render a claim patent-eligible.

In a potentially significant omission, the Court did not analyze whether the claimed architecture for the side wager, when considered in combination with the other gaming mechanics and the required physical implementation, could cooperatively result in an inventive concept amounting to significantly more than the generic identification of a set of rules for conducting a wagering game. Internet Patents Corp. v. Active Network, Inc., 790 F.3d 1343, 1346 (Fed. Cir. 2015) (“By ‘consider[ing] all claim elements, both individually and in combination, [this analytical framework] is consistent with the general rule that patent claims ‘must be considered as a whole.’”)

Continuing in that vein, courts are prohibited from ignoring elements or distilling the claims to an underlying principle when they analyze claims under 35 U.S.C. § 101. Diamond v. Diehr, 450 U.S. 175, 189 (1980) (“[C]laims must be considered as a whole. It is inappropriate to dissect the claims ….”). Here, the Court did not dig into the actual gaming architecture required by the claims or consider the features put forth by the applicant as representing an advance in the art. By considering the claims at such a high level of abstraction, the Court essentially ignored all those elements required by the claims that distinguish it from what came before. By way of comparison, a court reconsidering the claims in Diehr from the same level of abstraction could characterize the methods at issue in Diehr as mere data gathering, application of an algorithm, and an instruction to apply the data and algorithm in a particular technological environment, which is a rationale often deployed to invalidate or reject claims.

As this area of the law continues to be in flux, patent owners, patent applicants, and practitioners may consider presenting arguments relying on the particular combination required by their claims to avoid having the claims being characterized as abstract and to demonstrate that what they are claiming amounts to significantly more than an abstract idea.

The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation.